Financial Daily from THE HINDU group of publications
Monday, Oct 21, 2002
Village telephony: Operators rapped for seeking USO fund
NEW DELHI, Oct. 20
ACTING very much a strict school teacher, the Department of Telecommunications has rapped the private basic operators for seeking a share of the Universal Service Obligation (USO) Fund for meeting their village telephony costs.
According to highly placed DoT officials, six operators - Reliance Telecom, Hughes Tele.com, Bharti Telenet Ltd, Tata TeleServices Ltd, Shyam Telelink and HFCL Infotel - have been told to fulfil their "contractual obligations" of providing village telephones, which they had committed four years ago, without looking for relief from the Government.
"There is no question of allowing them access to the fund for their village public telephone (VPT) installations. The USO guidelines clearly state that no reimbursement towards capital recovery shall be admissible and given to these operators. However, the net cost towards operating expenses of these VPTs will be reimbursed. We do not intend to make any changes in these guidelines", they said.
Dismissing their criticism that it would be unfair to deny them access to the fund even as the new operators can claim capital expenditure reimbursement, the officials noted that since it was a contractual agreement, DoT could not make any alterations.
They also refuted the claim the obligations had been waived as part of the migration package that was offered to them under NTP `99.
It was made clear to the operators right at the beginning that the migration package would not alter their contractual obligations. The licence agreements that they had signed with DoT clearly stipulated that fulfilling the VPT obligation was a contractual agreement and binding, they said.
The officials noted that the tenders issued in 1995 for provision of basic telephone services stipulated provision of VPT as a criteria for award of licence.
Fifteen per cent weightage was given for the number of VPTs and 10 per cent for direct exchange lines during the first three years. This had played an important role in awarding the contracts to the private operators. Now they could not claim concessions, they noted.
They observed that none of the six operators had shown any inclination towards providing VPTs in their circles of operation.
Of the total commitment of nearly 98,000 VPTs in the first three years of their operation (by September 2000), only 675 VPTs were installed till December 2002, when DoT started acting tough.
The tough stand led to a sea change in the attitude of the private operators. As of now 4,059 VPTs have been installed, a net addition of 3,384 VPTs in the past nine months.
Tata TeleServices leads the race, having installed 1,263 VPTs in Andhra Pradesh (against a commitment of 9,635) followed by Hughes Tele.com 720 VPTs in Maharashtra (25,760), HFCL Infotel 705 VPTs in Punjab (5,442). Shyam Telelink has installed 521 VPTs in Rajasthan (31,834), Reliance Telecom 502 VPTs (8,635) and Bharti Telenet 348 VPTs (against 16,500).
The officials noted that the operators continued to lag behind their targets and had been given time till December 2003. With so many extensions given, they should stop seeking more concessions from the department, they noted.
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